business model

Rural networks cost three times more, but are feasible says Telefonica R&D chief

24 September 2017 by Steve Blum
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Higher costs, relative to the number of homes served, and lower income levels, compared to urban areas, is the fundamental business model problem that has to be solved in order to extend wireless broadband service into rural area. But it can be solved, even in some of the most extreme cases. David del Val, Telefonica’s head of research and development in Latin America, described the hurdles he’s encountered delivering Internet connectivity to remote regions, in a speech at last week’s inaugural Mobile World Congress Americas trade show in San Francisco.… More

Open access does not guarantee open broadband competition

2 September 2017 by Steve Blum
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When national governments run mobile broadband networks, they do not run them well. That’s the unsurprising conclusion of a white paper published by GSMA, the trade association for mobile network operators that rely on GSM standards to one extent or the other – in other words, pretty much all of them.

A trade association that lobbies governments to advance the interests of its members might be expected to oppose what amounts to nationalisation of mobile network infrastructure and operations.… More

Legacy telcos chalk up historically bad financial results


Forward looking statement.

It’s hard times for legacy telephone companies, at least the sort that have to rely on wireline – mostly copper – systems to serve customers. The plummeting share prices of Frontier Communications, CenturyLink and Windstream have gone where no telco has gone before. According to a story by Sean Buckley in FierceTelecom, that’s the conclusion of financial analysts at Cowen…

“Shares in the wireline [incumbent/rural carrier] space (CenturyLink, Frontier, Windstream) have endured the worst three consecutive quarters in industry history, with shares plummeting an average of -20% in 4Q16, -21% in 1Q17, and -24% in 2Q17 (we note another -5% in 3Q17 thus far), mostly from Frontier and Windstream as CenturyLink shares are being supported by the Level 3 acquisition,” Cowen said in a research note…

Overall, the three companies face the industry-wide challenge of balancing strategic service growth with ongoing legacy service declines and losing market share to cable operators.

… More

Is Atherton Fiber living in the real world? Part 2

14 July 2016 by Steve Blum
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Urban living, Atherton style.

An appallingly high take rate – 70% – and a vague reliance on third party ISPs to do the heavy lifting of achieving it are two reasons to be skeptical about Atherton Fiber’s plan to build a fiber to the home system that would reach all 2,500 households (there are no commercial properties as such) within the city limits, as discussed more fully in Part 1. It would not work in a typical Californian community.… More

Is Atherton Fiber living in the real world? Part 1

13 July 2016 by Steve Blum
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A deeper dive into the Atherton Fiber business model raises questions about its sustainability, given the assumptions that appear to have gone into it. The proposed fiber-to-the-home project would pass all 2,500 residences in Atherton. It seems there are no brick and mortar business customers there – the whole town is residential. Yes, it’s that exclusive.

The first red flag is an assumed take rate of 70% within four years. In a typical Californian community that assumption would be delusional.… More

Google Fiber radically changes its business model

26 February 2016 by Steve Blum
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Evolution happens faster than you expect.

Google Fiber is steering away from the massive capital investment required to build fiber to the home networks – even just in cherry picked fiberhoods – and going after targets of opportunity where someone else is paying for the glass. This week it’s signed a deal with Huntsville, Alabama to be the anchor service provider on a fiber to the premise system that the city will build and followed it up with an announcement that it’ll be using other people’s fiber to offer a very limited kind of service in San Francisco…

By using existing fiber to connect some apartments and condos, as we’ve done before, we can bring service to residents more quickly.

… More

Service level agreements are a calculated risk, so make sure you calculate carefully

26 December 2015 by Steve Blum
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When a power failure at the Hurricane Electric data center took this website down for five hours earlier this year, I looked up the Linode service level agreement (SLA) I accepted, and found that I probably made a good cost/benefit choice, but even so it’s worth revisiting at some point.
Upgrading to a platform with significantly higher reliability could be costly though. It means I have to find a hosting company that uses data centers and other infrastructure with a better SLA than Linode apparently has with Hurricane.… More

How not to run a telecoms company

7 June 2015 by Steve Blum
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Hey, maybe no one will notice that it broke?

It was no black swan event that brought down a big chunk of Hurricane Electric’s data center #2 in Fremont last weekend. Instead, it was an easily foreseeable malfunction that should have been taken into account when the center was designed. According to a postmortem report posted by Linode – the company primarily affected by the outage – when PG&E’s line went out at the facility, a bad battery kept backup power from kicking in…

Seven of the facility’s eight generators started correctly and provided uninterrupted power.

… More

You pays yer money, you takes yer chances

30 May 2015 by Steve Blum
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Hurricane Electric should have been prepared for this.

I’ve been reading, negotiating and occasionally writing service level agreements (SLAs) for many years. It’s an abstract exercise – so many nines for so much money. That’s until until something happens and you have to figure out whether 1. you stupidly hand waved the whole thing hoping that nothing would happen, 2. the calculated risk you took was worth it, or 3. you got screwed by your service provider.… More

British Telecom rolling out user-financed FTTH service


Brits surf different too.

The cost of directly connecting a home to British Telecom’s fiber network will be in the thousands of dollars range. BT has released details on the formula it will use to calculate the charge for running fiber from a neighborhood node – fiber to the cabinet in BT’s terminology – to a home or business.

The minimum charge is £700, about $1,075 at today’s exchange rate. BT says that 55% of its customers can fiber up for somewhere between £700 and £1,500 (about $2,300).… More